FxWirePro: EUR/JPY recovery capped at 125 levels, further upside only on breaks above
EUR/JPY edged higher from session lows at 123.93, recovery in the pair was capped at 125.06. ECB policy meeting on 10th March is a major risk event for the pair. Growth and inflation expectations have deteriorated consid…
EUR/JPY edged higher from session lows at 123.93, recovery in the pair was capped at 125.06.
ECB policy meeting on 10th March is a major risk event for the pair.
Growth and inflation expectations have deteriorated considerably in the euro area raising the likelihood that the ECB will decide a comprehensive package of measures next Thursday.
If the ECB along with a rate cut introduces a tiered interest rate or completely exempts a part of excess reserves from the negative interest rate, the EUR should come under stronger pressure.
Technicals are biased higher, momentum is higher, pair is holding above 5 and 10 DMA supports at 123.80 and 123.95 respectively.
Markets already priced-in 10 bps deposit rate cut, and if the ECB fails to deliver, we could see downside pressure.
For now, the major is capped at 125 levels, and any breaks above could see gains upto 125.56. Below 5-DMA, downside upto 122.45 likely
